By Esther Fung
Simon Property Group is trying to open many malls as soon as it
can, but some local politicians are stalling efforts to get many of
them back in business.
In the past two weeks, the Indianapolis-based company had to
backpedal on plans for reopening some of its properties in Indiana
and New York, after local officials--especially in areas harder hit
by the coronavirus--said it was too soon to allow people into
malls.
In Indiana, Simon Property had to postpone the reopening dates
of four malls from the first weekend of May to May 16. The governor
loosened stay-at-home regulations on May 1 but Marion County and
Monroe County, which have higher population densities, extended
their respective stay-at-home orders till May 15.
In New York, local lawmakers said they were surprised last week
when they learned that Simon Property plans to open its seven malls
and outlets in the state on May 16, including tourist magnet
Woodbury Common Premium Outlets and the Shops at Nanuet, the day
after the state's executive order to stay at home ends. Simon
Property later said it made a mistake including properties in New
York and it will comply with the state and local directives.
"At first I thought it was a rumor, and I was shocked to hear
and see on their website, information that they will open on the
16th. I think that it's really inappropriate to be advertising that
right now," said David Carlucci, a Democratic New York state
senator, later adding that he appreciated the company's correction
on the matter.
"This is really the epicenter of where we had the highest
infection rate of Covid-19; we still have deaths every day in
Rockland County and throughout New York state," said Mr. Carlucci.
"Yes the hospitalization rate has declined over the past few weeks,
thank goodness, but we are not out of the woods yet."
New York state officials said the pace of reopening depends on a
formula based on hospitalization rates. While construction and
manufacturing may restart first, restaurants and hair salons may
only reopen in June at the earliest.
Simon Property, the largest mall owner in the U.S. with more
than 200 properties in the country, is seen as a leader and
trendsetter in the industry. It introduced a slew of
social-distancing protocols, placed hand sanitizers and offered
face masks to any shopper who requests it. Its reopening list,
which could change depending on state and local guidelines, has
malls in Massachusetts, Connecticut, Hawaii, Minnesota, Wisconsin
and Illinois that will open after May 16.
In the first quarter, the company reported a 20.2% decline in
net income attributable to shareholders, from the same period a
year earlier. During the earnings call, Simon Property's chief
executive, David Simon, said that 77 of its U.S. properties have
reopened with safety guidelines as of May 11, and that the
retailers are benefiting from pent-up demand.
"The municipalities and the governments ultimately are going to
appreciate what we've done year after year, delivering sales and
property tax payments," said Mr. Simon. "We'd garner the respect
that we deserve."
Companies and local officials are trying to find a way to reopen
businesses to prevent the economy from deteriorating further and at
the same time, prevent a second wave of infections. Guidelines
could differ from county to county, and some smaller businesses
have petitioned to reopen their stores earlier.
Malls in South Carolina, Georgia, Oklahoma and Texas were among
the first to reopen. In Florida, shopping centers in Miami-Dade
county and south Florida remained closed, while their peers in
other parts of the state have reopened because they had lower rates
of infection.
Illinois is lifting restrictions at a slower pace than these
states, with a five-phase reopening plan.
Regarding malls, Illinois Gov. J.B. Pritzker, said on Thursday
that reopening indoor venues with hundreds of people walking
together will be extraordinarily difficult under the
epidemiological recommendations. "That's something that will have
to happen over the course of months and not in the immediate next
phase," said Mr. Pritzker.
Some brokers noted retail landlords struggling with rent
collection in April and May are prodding their tenants to get ready
to reopen so there is less excuse to not pay rent.
Landlords also noted that many regions rely on malls for
revenues from property and sales taxes and if closures continue,
they will ask for more tax relief. In New Hampshire, Simon Property
has already asked the city of Manchester to defer taxes and reduce
its assessment of the Mall of New Hampshire.
Tenants also want to reopen businesses, but they are concerned
about how quickly to ramp up operations because of capacity
restrictions and uncertainty over how much demand would
recover.
"It's a crazy dance," said Soozan Baxter, a retail and
hospitality consultant.
Other landlords said they prefer to wait for the state to
provide a date for nonessential retail to open.
Mall of America in Bloomington, Minn., said that it began
curbside pickup last week after the governor gave an order allowing
nonessential retail to proceed on May 4, but for now, the property
remains closed.
The country's largest mall by leasable retail space is working
with state and national organizations in retail, theme parks,
attractions and tourism to come up with plans focused on how to
keep people safe and comfortable when we welcome them back, said
Jill Renslow, executive vice president of business development and
marketing for Mall of America.
"We will continue following guidance from our state government
on a safe reopening timeline," said Ms. Renslow.
Write to Esther Fung at esther.fung@wsj.com
(END) Dow Jones Newswires
May 12, 2020 08:14 ET (12:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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